Textron (TXT) Misses Q3 Earnings Estimates, Narrows EPS View
Textron Inc. TXT reported third-quarter 2018 adjusted earnings from continuing operations of 61 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 19.7%. The bottom line also decreased 6.2% from 65 cents in the year-ago quarter.
This year-over-year decline can be attributed to drop in revenues during the reported quarter.
Including one-time gain of $1.65, the company reported GAAP earnings of $2.26 per share, compared with 60 cents registered in third-quarter 2017.
Textron Inc. Price, Consensus and EPS Surprise
Textron Inc. Price, Consensus and EPS Surprise | Textron Inc. Quote
Total revenues in the quarter were $3,200 million, which fell short of the Zacks Consensus Estimate of $3,531 million by 9.4%. The reported figure also declined 8.2% from the year-ago figure of $3,466 million due to lower contribution from all the four segments.
Manufacturing revenues were down 9.8% to $3,185 million, while revenues at the Finance division declined 16.7% to $15 million.
Textron Aviation: In the quarter under review, revenues at this segment dropped 1.8% to $1,133 million from $1,154 million in the year-ago quarter. The decline can be attributed to lower volume and mix reflecting lower turboprop volume.
The company delivered 41 jets, flat with last year; and 43 commercial turboprops, down from 53 in the previous year.
The segment registered profits of $99 million in the third quarter, up from $93 million in the year-ago quarter owing to favorable price and performance. Order backlog at the end of the quarter was $1.8 billion, slightly up from the prior quarter’s $1.6 billion.
Bell: Revenues from this segment summed $770 million, down 5.2% from the year-ago level of $812 million. Unfavorable commercial mix led to the downside.
Segment profits were up by 6.6% to $113 million. Bell’s order backlog at the end of the quarter was $5.7 billion, up $0.2 billion from the preceding quarter.
Textron Systems: Revenues at this segment came in at $352 million, down from $458 million a year ago mainly due to lower volume in the Simulation, Training & Other product line. Also, lower TAPV deliveries at Textron Marine & Land Systems dented this segment’s top-line performance.
Additionally, segmental profits decreased to $29 million from $40 million on lower net volume.
Textron Systems’ backlog at the end of the third quarter summed $1.1 billion, slightly lower than $1.2 billion in the second quarter of 2018.
Industrial: Revenues at this segment fell 10.7% to $930 million, mainly on account of the divestiture of the company’s Tools & Test product line.
Moreover, segmental profits were down by $48 million, primarily due to unfavorable pricing and performance. Also, sell out of the Tools & Test product line affected profit.
Finance: Revenues at this segment slipped to $15 million from $18 million in the year-ago quarter. Segmental profits also dropped to $3 million.
As of Sep 29, 2018, cash and cash equivalents were $1,150 million compared with $1,079 million as of Dec 31, 2017.
Cash flow from operating activities totaled $734 million at the end of the reported quarter compared with $327 million at the end of third-quarter 2017.
Capital expenditures amounted to $74 million compared with $115 million in the prior-year quarter.
Long-term debt was $3,069 million as of Sep 29, 2018, compared with $3,074 million as of Dec 31, 2017.
Textron narrowed its guidance for 2018. The company currently expects full-year adjusted earnings per share from continuing operations in the range of $3.20-$3.30 per share compared with $3.15-$3.35 projected earlier.
Textron currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Upcoming Defense Releases
General Dynamics GD is expected to report third-quarter 2018 results on Oct 24.
Boeing BA is also slated to report third-quarter results on Oct 24.
Huntington Ingalls HII is expected to report third-quarter results on Nov 8.
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